Tributes have been paid to former Labour chancellor Lord Denis Healey, who has died aged 98, with political foes and allies describing him as a "giant" of Westminster.

The Labour peer served in Number 11 during the 1974-79 government and became the party's deputy leader in 1980 during a career on the frontline of British politics which began in 1952.

He died peacefully at his home in Sussex yesterday morning after a short illness, his family said.

The Labour veteran, often viewed as "the best prime minister the party never had", served as a major in the Royal Engineers in North Africa and Italy.

During the Anzio landings he was a beach master, received the MBE, and was mentioned in despatches.

Lord Healey stood unsuccessfully for election in 1945 and eventually entered the Commons as MP for Leeds South East in 1952.

He reached the Cabinet as defence secretary in 1964, but he will be remembered for his role as chancellor during a turbulent time for the British economy which saw the UK forced to go to the International Monetary Fund for a bailout.

Lord Healey twice ran for the Labour leadership but was defeated by James Callaghan in 1976 when Harold Wilson quit, and then again in the contest with Michael Foot in 1980 which led to the party's leftward shift in opposition to Margaret Thatcher.

Labour leader Jeremy Corbyn said: "Denis Healey was a giant of the Labour Party whose record of service to his party and his country stands as his testament.

"He distinguished himself with his military service during the Second World War and continued that commitment to the British people as a Labour politician at the highest levels of government. His wit and personality transcended politics itself, making him one of the most recognisable politicians of his era.

"Speaking personally, we had many interesting conversations when I was first elected to Parliament in 1983 and I found him a decent and very knowledgeable man who I enjoyed engaging with, particularly in his work as shadow foreign secretary."

Prime Minister David Cameron said Lord Healey was a "huge figure" in British politics and highlighted his military service during the Second World War.

Mr Cameron said: "W e've lost a huge figure of post-war politics. A hero in World War Two as beach master at Anzio and a brave politician, Denis Healey told his party hard truths about Britain having to live within her means.

"By all accounts he was a hugely entertaining man personally - and author of tremendously readable and informative books. A great man and a genuine public servant has left us. We should mourn with his family and give thanks for all he gave our country."

Labour's leader in the House of Lords, Baroness Smith of Basildon, said: "Denis was a great man of British politics and a real character with a tremendous sense of fun.

"He maintained his passion and commitment and all of us in the Labour peers group will miss him so much."

Chancellor George Osborne described his predecessor as a "giant of the Labour movement". Lord Healey was in Number 11 when the government was forced to go to the IMF for a loan as the UK economy teetered on the brink of collapse in 1976.

Lord Healey was renowned in Westminster for his quick wit and sense of mischief.

He described debating with Geoffrey Howe as "like being savaged by a dead sheep" and had his own "first law" of politics: "When you're in a hole, stop digging."

Former Labour leader Lord Kinnock said: "Denis had high intellect, great personal courage, charm and a sense of humour which was rumbustious and, when needed, lethal.

"His 'hinterland', as he called it, was culturally broad and creative. It reflected his abiding conviction that everyone should have access to 'the best that beauty has to offer'.

"He didn't suffer fools gladly or, indeed, at all. That partly explains why he was never leader of the party despite having rich political talent."

Former prime minister Tony Blair credited Lord Healey with saving the Labour Party as an "instrument of Government and social change".

Lord Healey had initially been a supporter of Mr Blair, but was a critic of the Iraq War and called for him to stand down in favour of Gordon Brown.

Mr Blair said: "Denis Healey was a great champion for social justice, in and out of Government, a stalwart of the Labour Party, a true patriot who fought for and cared deeply about his country and an extraordinary and vibrant character.

"His was a generation which lived through the horrors of war and came back determined to build a peace that was progressive and offered the prospect of opportunity for all.

"He steered the Labour Government and the country through some of the most difficult economic times; and in winning the deputy leadership of the Labour Party in 1981, he probably saved the Labour Party as an instrument of Government and social change. All of us in the Labour Party owe him a huge debt. Britain has lost a dedicated and faithful public servant."